FEDERAL COURT OF AUSTRALIA

Unsworth v Tristar Steering and Suspension Australia Limited [2007] FCA 1081

EVIDENCE – legal professional privilege not lost – disclosure of documents in draft tender bundle was inadvertent – reasonable inspecting solicitor must have appreciated that documents were probably disclosed by mistake

Evidence Act 1995 (Cth), s 122

ACTEW Corp Ltd v Mihaljevic [2007] ACTSC 39 cited

Australian Securities and Investments Commission v Rich [2004] NSWSC 934 cited

Body Corporate No 413424R v Sheppard [2007] VSC 179 cited  

Boensch v Pascoe [2007] FCA 532 considered

BT Australasia Pty Ltd v State of New South Wales (No 8) (1998) 154 ALR 202 cited

Director of Public Prosecutions (Commonwealth) v Kane (1997) 140 FLR 468cited

Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 75 FCR 511considered

Sovereign Motor Inns Pty Ltd v Bevillesta Pty Ltd [2000] NSWSC 521 cited

Willett v Belconnen Soccer Club Ltd [2007] ACTSC 41cited  

INSPECTOR IAN UNSWORTH (OFFICE OF WORKPLACE SERVICES) v TRISTAR STEERING AND SUSPENSION AUSTRALIA LIMITED ACN 004 311 111

NSD 232 OF 2007

GYLES J

20 JULY 2007

SYDNEY

REASONS FOR RULING

1                     On 18 July 2007 I ruled that privilege was not lost to the applicant in relation to certain documents.  The issue of inadvertent disclosure of privileged documents arises yet again.  The stream which emerged in both the United Kingdom and Australia in the mid 1980s (eg Guinness Peat Properties Ltd v Fitzroy Robinson Partnership (a firm) [1987] 1 WLR 1027; Kabwand Pty Ltd v National Australia Bank Ltd (1987) 16 FCR 85 and Hooker Corporation Ltd v Darling Harbour Authority (1987) 9 NSWLR 538) now flows strongly and is likely to increase as electronic communication of documents becomes more prevalent.  Resolving the issue has been made no easier by backing and filling over the years as to the interplay between the application of the common law and the Evidence Acts and by some misapprehensions as to the application of fairness in this field that were corrected by the High Court in Mann v Carnell (1999) 201 CLR 1.  The parties are agreed that I should approach the issue on the basis that the Evidence Act 1995 (Cth) (the Act) is to be applied.

2                     The issue arose in the following way.  This case was fixed for hearing and commenced on Monday 16 July 2007.  Although there was no direction to prepare an agreed tender bundle, it is common that such a bundle be prepared in matters of this kind in this Court and in the Supreme Court of New South Wales.  The solicitors for the applicant undertook the task of preparing such a bundle in the week before the hearing was to commence.  The bundle of documents with which I was provided at the commencement of the hearing comprises 11 volumes.  In addition, there was a judge’s book comprising the pleadings and affidavits of some five volumes.  The case has been afforded expedition as it concerns an ongoing situation affecting both the respondent and a number of its employees.  In the course of preparation of the bundle, the solicitors for the respondent were given copies of two documents for which legal professional privilege had been claimed at the stage of discovery.  I am satisfied that the applicant would normally be entitled to maintain privilege in relation to each of those documents.

3                     Counsel for the respondent proposes to deploy each of the documents in the course of the hearing and has already sought to cross-examine on one of them.  Counsel for the applicant opposes that course and sought to maintain privilege in each of them and in the events underlying them, notwithstanding the handing over of the copy documents.  No application was made for return of the copy documents.

4                     The solicitor responsible for handing over the documents in question gave evidence which was not challenged.  I am satisfied that the handing over of the documents was the result of inadvertence in every sense of the word.  The urgent nature of the task at hand and the number of documents involved led to the solicitor in question simply not turning her mind to the existence of privilege in individual documents.  The copy documents in question were handed over in the mistaken belief that they formed part of a group of documents in which privilege had not been claimed and could not be claimed.  No evidence was called on the part of the respondent.  I have inspected the two documents for the purpose of ascertaining what their general appearance would be to a recipient but I have not fully read them. 

5                     I conclude that the document headed “Meeting Clayton Utz 11.05.07” would have immediately appeared to a competent solicitor to be a document that was prima facie privileged, Clayton Utz being the firm of solicitors representing the applicant.  The status of the document entitled “OWS: Leigh Johns Ross Drysdale Ian Unsworth 18.05.07” is not so obvious but, bearing in mind its date and its general topic, it must have appeared as entitled to privilege.  Further, it would have appeared likely to such a solicitor that the documents had been produced as a result of a mistake once the nature of them was appreciated when they were inspected for the purposes of preparation for the case.  There was no obvious forensic purpose to be served for the applicant in waiving privilege in either of the documents.  The scale and urgency of the task being performed by the solicitors for the applicant was known to the respondent’s solicitors and was consistent with a mistake being made.  I am also satisfied that steps were taken by the applicant to repair the situation in a timely fashion, all things considered.

6                     Loss of client legal privilege for relevant purposes is governed by s 122 of the Act.  Section 122(2) involves a party knowingly and voluntarily disclosing to another person the substance of the evidence.  Section 122(4) deals with the substance of the evidence having been disclosed with the express or implied consent of the party to another person.  Counsel for the applicant submitted that I should follow the decision of Jacobson J in Boensch v Pascoe [2007] FCA 532 where his Honour held (at [38]):

“An inadvertent or unintentional act will not be sufficient to amount to waiver.” 

I would normally follow such a recent and considered decision of a judge of the Court.  However, the other authorities to which I was referred by counsel drew attention to the decision of Goldberg J in Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 75 FCR 511, to which Jacobson J was apparently not referred, in which Goldberg J made a detailed analysis of the statutory provisions and the authorities and concluded that mere inadvertence or unintentional disclosure in itself is not sufficient to maintain privilege particularly where documents have been inspected.

7                     Faced with that apparent conflict between judges of the Court, in the time available I endeavoured to see what has happened in other courts.  That exercise has further confused the picture.  For example, counsel for the applicant relied heavily upon the decision of Austin J in Sovereign Motor Inns Pty Ltd v Bevillesta Pty Ltd [2000] NSWSC 521 in which privilege was maintained, notwithstanding inspection of the document by the other side.  On the other hand, Austin J considered a similar question in Australian Securities and Investments Commission v Rich [2004] NSWSC 934 and held that disclosure of documents which could be described as inadvertent, in a situation not unlike the present, was held to be knowing and voluntary pursuant to s 122(2) of the Act without reference to his decision in Sovereign Motor Inns [2000] NSWSC 521.  The question is further complicated where the opposing party actually has a copy of the document in his possession available to be used.

8                     At about the same time that Meltend 75 FCR 511 was decided, Hunt CJ at CL in New South Wales also reviewed the authorities in some detail in Director of Public Prosecutions (Commonwealth) v Kane (1997) 140 FLR 468.  That judgment provides support for the view that a document sent inadvertently or mistakenly would not be disclosed voluntarily within the meaning of s 122, particularly if the hypothetical reasonable solicitor would have realised that it had been sent by mistake.  Not long afterwards, Sackville J said something similar in BT Australasia Pty Ltd v State of New South Wales (No 8) (1998) 154 ALR 202 at 208–209.  The authorities have again recently been reviewed by Harper M in the Supreme Court of the Australian Capital Territory in ACTEW Corp Ltd v Mihaljevic [2007] ACTSC 39 and Willett v Belconnen Soccer Club Ltd [2007] ACTSC 41.  In both cases his Honour followed Meltend 75 FCR 511.  Pagone J of the Victorian Supreme Court did the same in Body Corporate No 413424R v Sheppard [2007] VSC 179.

9                     A single judge of this Court is in a difficult position given the current state of authority.  It is not possible to reconcile all of the statements that have been made.  However, for the purposes of this case, even if I were to apply the more restricted approach of Goldberg J, I favour maintenance of the privilege.  The disclosure was inadvertent in every sense of the word and, in my opinion, an inspecting solicitor (and barrister) must have appreciated the probability of the documents having been included in the draft bundle by mistake as soon as the nature of each of the documents and the contents of them were appreciated.  If it be relevant, I find that the solicitors for the respondent so concluded in the absence of evidence to the contrary.

10                  For those reasons, I held that privilege had not been lost pursuant to s 122 of the Act.

Associate:

Dated:         24 July 2007